Stop Foreclosure With Chapter 13
By Filing Chapter 13 You Can Stop Foreclosure on Your Home
Chapter 13 stops an imminent foreclosure by creating an automatic stay as to all creditor action. The automatic stay of a bankruptcy case is what makes a bankruptcy filing so powerful. With very limited exception, the minute a Chapter 13 case is filed, all creditor action must come to a stop. If a creditor intentionally continues adverse action against a debtor who has filed bankruptcy that creditor can be sanctioned.
The automatic stay of Chapter 13 applies even if the creditor is not aware that a bankruptcy filing has commenced. For example, if your house was scheduled for a foreclosure at 10 AM on “foreclosure Tuesday,” and your attorney filed a Chapter 13 case at 9:51 AM, that foreclosure would be void even if the foreclosing mortgage company was unaware of the bankruptcy filing. A good faith third party purchaser would not be entitled to claim ownership of your house and any title transfer would have to be reversed.
Automatic stay protection can be less comprehensive for second or third bankruptcy filings. Click on the link to read more about how the 2005 Amendments to the Bankruptcy Code changed the automatic stay rules for repeat bankruptcy filers.
Obviously, the attorneys at Clark & Washington strongly suggest that you not wait until the day or even week before your foreclosure to start the Chapter 13 bankruptcy filing process. Instead, call us at 770-488-9300 the minute you realize that your home is under the threat of a foreclosure.